IJ Reilly
Dec 1, 2003, 10:47 AM
http://www.latimes.com/news/politics/columns/la-na-outlook1dec01,1,6080296.column
Ronald Brownstein: Washington Outlook
Snowballing Debt Awaits Tomorrow's Taxpayers
Seniors with big prescription drug bills, health maintenance organizations awaiting lucrative new subsidies, upper-middle-class families anticipating a fat tax refund, and Iraqi cities expecting new schools or hospitals all have reason to be thankful about President Bush's extraordinary success at pushing his agenda through the Republican-controlled Congress this year.
There may be less celebration among the young people who will inherit the tab for these initiatives. Bush is funding every penny of every one of these goodies by increasing the national debt. Which is another way of saying that he's sticking the bill to the next generation.
The scale of the transfer is dizzying.
In just the last few months, Congress, at Bush's request, has doled out $87 billion to rebuild and secure Iraq and Afghanistan; approved a $401-billion defense appropriation bill, the largest ever; completed a $1-trillion tax cut on top of the $1.35-trillion reduction the president won in 2001; and approved a Medicare prescription drug benefit that will cost at least $400 billion over the next decade, probably more. If the energy bill is revived next year, add to the list at least another $26 billion in tax cuts for energy companies.
All of this, it's worth remembering, comes when the federal government already faces its largest deficit ever — some $374 billion last year, $84 billion more than the previous record held by Bush's father, George H.W. Bush.
Several reliable analysts project the federal deficit will soar past $500 billion this year — and then remain near that unprecedented level for the indefinite future, even if the economy recovers. It's an understatement to conclude, as the Goldman Sachs investment bank did in a recent report, that the budget process in Washington is "out of control."
Project this forward a few years and the fiscal strain on future taxpayers could become excruciating. By 2012, Bush's tax cuts would reduce federal revenue by almost $400 billion a year, according to calculations by Peter Orszag of the Brookings Institution.
Even without the new prescription drug benefit, the swelling number of seniors and the rising cost of care would push the annual bill for Medicare past $500 billion by then, according to the Congressional Budget Office. The drug subsidy for seniors would add at least another $65 billion to the tab. The CBO says that by 2012, defense spending would approach $600 billion annually — a number other analysts say understates the price tag for Bush's long-term national security plans.
Then comes the final indignity for tomorrow's taxpayers: huge interest payments on the debt the government is accumulating to finance this binge. When Bush took office, the CBO estimated Washington was on track to eliminate the publicly held federal debt by 2008. That meant federal interest payments on the debt, which were running about $200 billion a year when Bush arrived, were expected to dwindle to virtually nothing by the end of this decade.
Now, though, the latest estimates are that amid the economic slowdown of the last two years, and all the new spending and tax cuts Bush has pursued, the federal debt could soar to at least $7 trillion by decade's end. That means future taxpayers will have to pay at least $350 billion a year to service that debt, precisely as they are shouldering big bills for homeland security, defense and retiring the baby boom.
To call this behavior a breakdown of fiscal responsibility misses its true nature. This is a stunning abandonment of generational responsibility. Washington is behaving like a father who steals his kid's credit card and goes on a bender.
Individually, America's parents make sacrifices every day to provide opportunities for their children; but collectively, the nation is now pursuing precisely the opposite course — indulging itself even at the price of reducing opportunity for its children.
Is anyone speaking for the next generation? At the national level, Democrats have condemned Bush's deficits and highlighted the costs of his tax cut. But they've undercut their credibility by repeatedly demanding more spending on their favorite causes; it's telling that the principal criticism from Democrats about the new Medicare bill is that it doesn't spend enough to subsidize drugs for seniors.
Most Republicans are apparently hoping they can make these deficits disappear by ignoring or discounting them; the noble exceptions are a handful of true fiscal conservatives like Sens. John McCain (R-Ariz.) and Charles Hagel (R-Neb.). "There is a larger point to all of this," Hagel lamented after the Senate approved the Medicare bill last week. "Who is looking out for the future of the country?"
It's unrealistic to expect too many legislators to take that long view. Budget discipline is as much an unnatural act for Congress as refusing campaign contributions; for legislators, the long run is always the next election. Only a determined president can prevent Washington from spending more than it is willing to collect in taxes. But Bush has led the U-turn from the policies that produced surpluses for the three years immediately before he arrived.
The best case against Bush's budget policies comes from the arguments he's made for his national security strategy. Bush often defends his vision of preemptive defense by insisting America must confront tough problems now so future generations won't face them down the road. Yet in his budget, Bush is creating enormous problems for future generations by avoiding tough choices today.
By slashing taxes while he increases spending, Bush is governing as if he is in the Matrix, where the laws of gravity don't apply. But here in the real world, what goes up still comes down, which means kids too young to protest today will pay dearly tomorrow for the massive debts Bush is charging to their future.
Ronald Brownstein: Washington Outlook
Snowballing Debt Awaits Tomorrow's Taxpayers
Seniors with big prescription drug bills, health maintenance organizations awaiting lucrative new subsidies, upper-middle-class families anticipating a fat tax refund, and Iraqi cities expecting new schools or hospitals all have reason to be thankful about President Bush's extraordinary success at pushing his agenda through the Republican-controlled Congress this year.
There may be less celebration among the young people who will inherit the tab for these initiatives. Bush is funding every penny of every one of these goodies by increasing the national debt. Which is another way of saying that he's sticking the bill to the next generation.
The scale of the transfer is dizzying.
In just the last few months, Congress, at Bush's request, has doled out $87 billion to rebuild and secure Iraq and Afghanistan; approved a $401-billion defense appropriation bill, the largest ever; completed a $1-trillion tax cut on top of the $1.35-trillion reduction the president won in 2001; and approved a Medicare prescription drug benefit that will cost at least $400 billion over the next decade, probably more. If the energy bill is revived next year, add to the list at least another $26 billion in tax cuts for energy companies.
All of this, it's worth remembering, comes when the federal government already faces its largest deficit ever — some $374 billion last year, $84 billion more than the previous record held by Bush's father, George H.W. Bush.
Several reliable analysts project the federal deficit will soar past $500 billion this year — and then remain near that unprecedented level for the indefinite future, even if the economy recovers. It's an understatement to conclude, as the Goldman Sachs investment bank did in a recent report, that the budget process in Washington is "out of control."
Project this forward a few years and the fiscal strain on future taxpayers could become excruciating. By 2012, Bush's tax cuts would reduce federal revenue by almost $400 billion a year, according to calculations by Peter Orszag of the Brookings Institution.
Even without the new prescription drug benefit, the swelling number of seniors and the rising cost of care would push the annual bill for Medicare past $500 billion by then, according to the Congressional Budget Office. The drug subsidy for seniors would add at least another $65 billion to the tab. The CBO says that by 2012, defense spending would approach $600 billion annually — a number other analysts say understates the price tag for Bush's long-term national security plans.
Then comes the final indignity for tomorrow's taxpayers: huge interest payments on the debt the government is accumulating to finance this binge. When Bush took office, the CBO estimated Washington was on track to eliminate the publicly held federal debt by 2008. That meant federal interest payments on the debt, which were running about $200 billion a year when Bush arrived, were expected to dwindle to virtually nothing by the end of this decade.
Now, though, the latest estimates are that amid the economic slowdown of the last two years, and all the new spending and tax cuts Bush has pursued, the federal debt could soar to at least $7 trillion by decade's end. That means future taxpayers will have to pay at least $350 billion a year to service that debt, precisely as they are shouldering big bills for homeland security, defense and retiring the baby boom.
To call this behavior a breakdown of fiscal responsibility misses its true nature. This is a stunning abandonment of generational responsibility. Washington is behaving like a father who steals his kid's credit card and goes on a bender.
Individually, America's parents make sacrifices every day to provide opportunities for their children; but collectively, the nation is now pursuing precisely the opposite course — indulging itself even at the price of reducing opportunity for its children.
Is anyone speaking for the next generation? At the national level, Democrats have condemned Bush's deficits and highlighted the costs of his tax cut. But they've undercut their credibility by repeatedly demanding more spending on their favorite causes; it's telling that the principal criticism from Democrats about the new Medicare bill is that it doesn't spend enough to subsidize drugs for seniors.
Most Republicans are apparently hoping they can make these deficits disappear by ignoring or discounting them; the noble exceptions are a handful of true fiscal conservatives like Sens. John McCain (R-Ariz.) and Charles Hagel (R-Neb.). "There is a larger point to all of this," Hagel lamented after the Senate approved the Medicare bill last week. "Who is looking out for the future of the country?"
It's unrealistic to expect too many legislators to take that long view. Budget discipline is as much an unnatural act for Congress as refusing campaign contributions; for legislators, the long run is always the next election. Only a determined president can prevent Washington from spending more than it is willing to collect in taxes. But Bush has led the U-turn from the policies that produced surpluses for the three years immediately before he arrived.
The best case against Bush's budget policies comes from the arguments he's made for his national security strategy. Bush often defends his vision of preemptive defense by insisting America must confront tough problems now so future generations won't face them down the road. Yet in his budget, Bush is creating enormous problems for future generations by avoiding tough choices today.
By slashing taxes while he increases spending, Bush is governing as if he is in the Matrix, where the laws of gravity don't apply. But here in the real world, what goes up still comes down, which means kids too young to protest today will pay dearly tomorrow for the massive debts Bush is charging to their future.
